It seems odd that market sentiment should fall so precipitously, considering the market is only down around 6% from its highs. But then again, QE 2 is winding down, which is making the bulls a little glittery. Below is a chart of one very good indicator I follow, which is flashing a contrarian buy signal. It is known as the Nasdaq Sentiment Index courtesy of Market Harmonics. Yes, sentiment surveys have been largely useless in response to the Fed's money printing POMOs, but this indicator has a relatively good track record of calling market bottoms. A reading below -150 usually indicates a bounce. We are currently at -194.

While this indicator looks good, I am going to wait for the latest AAII sentiment poll on Thursday for confirmation. I would like to see some real capitulation on the part of the retail crowd. That would give further evidence that the market is nearing a bottom--at least for the intermediate period.

Here is a list of EU banks with the highest amount of exposure to Irish debt default . The data is based on the EU stress test results . ...

Words of Wisdom from Leonardo da Vinci

1. I have been impressed with the urgency of doing. Knowing is not enough; we must apply. Being willing is not enough; we must do.

2.Simplicity is the ultimate sophistication.

3.Life well spent is long.

4.Life is pretty simple: You do some stuff. Most fails. Some works. You do more of what works. If it works big, others quickly copy it. Then you do something else. The trick is the doing something else.

5. Marriage is like putting your hand into a bag of snakes in the hope of pulling out an eel.

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